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  • Rising US bond yields underpinned the USD and helped gain follow-through traction.
  • The prevalent risk-on mood dented CHF’s safe-haven demand and remained supportive.
  • Friday’s key focus will remain on Powell’s scheduled speech at Jackson Hole Symposium.

The USD/CHF pair continued scaling higher through the early European session on Friday and climbed further beyond mid-0.9800s, hitting three-week tops in the last hour.
A combination of supporting factors assisted the pair to build on its recent recovery from yearly lows and gain a follow-through positive traction for the third consecutive session on Friday – also marking the sixth day of a positive move in the previous seven.

Risk-on mood/stronger USD remained supportive

The prevalent risk-on mood – as depicted by a positive mood across global equity markets – was seen denting demand for traditional safe-haven currencies – including the Swiss Franc – and continued fueling the ongoing positive momentum around the major.
Improving risk sentiment was further reinforced by a goodish pickup in the US Treasury bond yields, which helped the US Dollar to catch some fresh bid and further collaborated to the pair’s up-move to the 0.9870  region ahead of Friday’s key event risk.
The Fed Chair Jerome Powell is scheduled to speak at Jackson Hole Symposium and his comments will be closely scrutinized for clues about the US central bank’s near-term policy outlook, which might help determine the pair’s next leg of a directional move.
Given that another rate cut in the September meeting is fully priced in, should Powell refrain from signalling aggressive policy easing, the USD is more likely to build on its recent strength and pave the way for an extension of the pair’s recent bullish trajectory.

Technical levels to watch